The price of copper has risen sharply on media reports that the Chinese government in Beijing is preparing stimulus measures to bolster the ailing domestic economy.
China is the world’s largest importer of copper and a rebound in the nation’s economy is expected to be a positive for the industrial metal.
Copper futures expiring in March rose more than 1% in the past 24 hours to $3.80 U.S. per pound, recovering nearly all the losses seen to start the year.
The jump in copper prices comes after Bloomberg News reported that government officials in Beijing are preparing a 2 trillion-yuan ($278 billion U.S.) support package for the economy.
China’s economy has experienced a pronounced slowdown over the last 18 months as consumer spending slows and a financial crisis worsens in the highly leveraged property market.
News of the government stimulus has raised expectations that copper demand in China will strengthen in coming months.
The worsening economic slump in China had weighed on copper prices over the past two years as demand for the metal waned in the nation of 1.4 billion people.
Copper is used in electrical wires and cables for its conductivity, as well as in plumbing, industrial machinery, and construction materials.
Over the last 12 months, copper futures have declined 11%.
